Legal Matters: Why small businesses need a minute book
This article was originally published by The Hamilton Spectator.
Q: What is a minute book, and why is it essential to small business owners?
A: Your corporate minute book is the collection of all your business’s important records.
No matter where your company is incorporated, maintaining an up-to-date and organized minute book allows you to easily share information about your business with fellow shareholders, banks, or potential purchasers of your company. The minute book also assists in avoiding delays and potential fines or legal costs.
All corporations are statutorily obligated to have an updated minute book. Various corporate documents are required to be stored within your minute book that provides key information about your business. Your business must also have adequate record-keeping procedures, and records of your meeting minutes and resolutions must be stored within. Failure to abide by these requirements can bring penalties from WSIB and/or the CRA, adverse tax consequences, or private lawsuits.
Despite the statutory obligations, minute books are very important in the life of your small business. If you are obtaining financing for your business from a bank or selling your business to a purchaser, they will want to see your minute book.
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